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Auditor issues unmodified opinion for Judson ISD but flags IT reporting and split-funded payroll; self-insurance reserve prompts board questions
Summary
External auditors gave Judson ISD an unmodified opinion on the 2025 financial statements, reported two recommendations (IT change-management reporting and time studies for split-funded capital payroll), and explained a $13 million self-insurance liability and delays to the single-audit report due to OMB/TEA submission timing.
Selena of Whitley Penn presented the district—s 2025 audit results and told the board Whitley Penn will issue an unmodified opinion on the financial statements, meaning the statements can be relied upon for state and rating-agency purposes. The audit found no internal-control findings rising to the level of significant deficiency or material weakness but included two recommendations: implement change-management reporting for IT user-access changes and perform time studies to validate split-funded capital-project payroll allocations.
The auditor walked trustees through major financial figures: total assets and deferred outflows of about $1.17 billion (capital assets about $690 million), cash and investments of about $355 million, receivables about $51 million, bonds payable of roughly $877 million, and a government-wide net position deficit of $15 million when pension and OPEB liabilities are included. The general fund actual revenues were reported at about $261.1 million with expenditures of $273.8 million; a transfer of $7.3 million to the self-insurance internal service fund was noted.
The auditors also explained two timing issues affecting the federal single-audit: a delayed OMB compliance supplement (draft released but final not issued) and TEA—s updated audit application, which created submission timing shifts. As a result, some federal-program testing and the single-audit report are temporarily asterisked pending the OMB supplement.
Board members pressed administrators and the auditor on the self-insurance fund and a reported $13 million in claims/reserves. The auditor explained that the $13 million includes an incurred-but-not-reported reserve (IBNR) and that premium collections, a $7.3 million general-fund transfer, and sales of investments covered the year's cash needs; administration indicated monitoring and possible future transfers will be part of 2025-26 planning.
The audit will be ratified by formal board action when federal reporting is complete or when the single-audit clears; auditors said they would return with final board certificates required for TEA and bond continuing-disclosure filings.
